Srinagar Municipal Corporation And ... vs Magray Pratibha Joint Venture
2024 Latest Caselaw 142 j&K/2

Jammu & Kashmir High Court - Srinagar Bench

Srinagar Municipal Corporation And ... vs Magray Pratibha Joint Venture on 26 February, 2024

Author: Rahul Bharti

Bench: Rahul Bharti

                                                            Supplementary
                                                              Serial 205


 HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                AT SRINAGAR

                  CM (M) 60/2024, CM (910/2024)

Srinagar Municipal Corporation and others
                                               ... Petitioner/Appellant(s)

Through: Mr. Moomin Khan, Advocate
                     V/s
Magray Pratibha Joint Venture
                                                       ... Respondent(s)
Through: Ms. Syed Tabasum Zafar Jalali, Advocate


CORAM: HON'BLE MR. JUSTICE RAHUL BHARTI, JUDGE
                              ORDER

26-02-2024

1. This petition under article 227 of the Constitution of India filed

by the petitioners brings forth a state of facts engaging the

attention of this court with an unavoidable concern.

2. For a project work of "Upgrading of 49 Dewatering Stations,

Srinagar City under Jhelum and Tawi Flood Recovery Project

(JTFRP)" at the project costs of Rs.102.89 crores, the respondent

is said to have earned a work order no. SMC/PS/Com/7259-64

dated 31.12.2018 accompanied with a purported agreement dated

11.01.2019 from and with the petitioner no. 1 - Commissioner,

Srinagar Municipal Corporation (SMC) which resulted in

purported issuance of a work notice dated 02.04.2019 in favour

of the respondent intending it to proceed with the execution of

the work.

3. In connection with the aforesaid state of work engagement, the

respondent came to approach the Principal District Judge,

Srinagar with a petition on file no. 17/2022 filed on 07.12.2022

under section 9 of the Arbitration and Conciliation Act, 1996

thereby seeking direction unto the two petitioners herein to

release a payment of Rs.21.28 crores against the invoice of the

work done bills said to have been already duly authenticated and

verified by the petitioners.

4. This petition under section 9 of the Arbitration and Conciliation

Act, 1996 so filed by the respondent came to be disposed of vide

an order dated 13.03.2023 by the court of Principal District

Judge, Srinagar with a direction to the petitioners to consider the

release of the respondent's admitted claim of Rs.17/- crores and

bill deposits amount of Rs.3/- crore within a period of one month

failing which the respondent left to take an appropriate legal

course for recovery of the admitted claim amount.

5. The respondent came to initiate contempt proceedings on the file

no. 02/2023 instituted on 27.04.2023 against the petitioners

herein before the same very court of Principal District Judge,

Srinagar in which, vide an order dated 08.5.2023, the petitioners

herein came to be represented by their advocate and direction for

compliance came to be issued.

6. The petitioners came forward with a submission of a compliance

report with respect to the order dated 13.03.2023 read with the

order dated 08.05.2023 passed by the court of Principal District

Judge, Srinagar by placing on record a consideration Order no.

660 of 2023 dated 30.05.2023 holding thereby that the claim of

the respondent was devoid of any merit for release of retention

money and of pending payments at the given stage and hence

rejected.

7. In the contempt proceedings, the court of Principal District

Judge, Srinagar, came to pass an order dated 01.06.2023 against

which the Srinagar Municipal Corporation - SMC and the

petitioners herein came to prefer a petition under article 227 of

the Constitution of India, being CM (M) 120/2023, which came

to be taken cognizance in terms of an order dated 09.06.2023 by

simultaneously recording an assurance of the respondent's

counsel that the respondent will not press the contempt

proceedings so pending before the court of Principal District

Judge, Srinagar.

8. On the other hand, by a simultaneous proceeding under

Arbitration and Conciliation Act, 1996, the respondent had come

to file on 06.10.2022 a petition Arb. P. 33/2022 against the

petitioners herein along with the Chief Executive Officer,

Economic Reconstruction Agency (ERA), Srinagar, invoking

section 11 of the Arbitration and Conciliation Act, 1996 which

resulted in passing of an order dated 04.08.2023 by the Hon'ble

Chief Justice thereby appointing Justice Mr. Hakeem Imtiyaz

Hussain (Former Judge of this High Court) as the sole arbitrator

to carry out the arbitration proceedings.

9. In this section 11 proceedings, the respondent came to seek

deletion of CEO, ERA which claim to be allowed in terms of

order dated 16.6.2023. In its petition under section 11, the

respondent pleaded pendency of admitted bills of

Rs.11,83,03,055/- and Rs.4,06,71,989/- and release of security

deposit, earnest money, CDR with interest and payment on

account of loss and damages on account of prolongation of

payment of admitted bills, loss of profit and settlement of rates of

extra items.

10. In the backdrop of the aforesaid developments in shape, the

respondent suddenly came to switch over, in the context of legal

proceedings, by filing civil suit in June, 2023 for recovery of

Rs.20/- crores invoking Order 37 of the Code of Civil Procedure,

1908 presented before the court of District Judge, Srinagar

wherefrom the suit came to be transferred for adjudication to the

court of 4th Additional District Judge, Srinagar.

11. In this civil suit, the two defendants who came to be named are

petitioners. On behalf of the petitioners as defendants, an

application came to be made on 26.06.2023 before the court of 4th

Additional District Judge, Srinagar purportedly invoking Order

37 Rule 3 Sub-Rule (5) as is borne out from Annexure XVIII

page 122 of the present petition, whereas the said application is

said to have been actually presented on 09.08.2023 before the

court of learned 4th Additional District Judge, Srinagar.

12. It is intervening these two dates that the respondent's petition

under section 11 of the Arbitration and Conciliation Act, 1996

had come to be disposed of in terms of an order dated 04.08.2023

passed by the Hon'ble Chief Justice appointing Mr. Justice

Hakeem Imtiyaz Hussain (Former Judge of this High Court) as an

arbitrator. Thus what was being claimed in the arbitration

reference came to be subject matter of the civil suit as well so

filed by the respondent under Order 37 Code of Civil Procedure,

1908 seeking recovery of Rs.20/- crores.

13. The petitioners' application filed under Order 37 Rule 3 Sub-

Rule (5) CPC came to be diarized on file no. 388/M by the court

of 4th Additional District Judge, Srinagar.

14. The court of 4th Additional District Judge, Srinagar, vide an order

dated 22.09.2023, came to transfer the civil suit so filed by the

respondent against the petitioners to the court of the Principal

District Judge, Srinagar with the request to transfer it to the

Commercial Court. In terms of this order, the parties to the suit

i.e. the respondent and the petitioners were directed to appear

before the court of Principal District Judge, Srinagar on

27.09.2023.

15. The Principal District Judge, Srinagar on 27.09.2023 came to

pass an order directing transfer of the civil suit of the respondent

to the court of Additional District Judge (Bank Cases) Srinagar

(Designated Commercial Court) and directed the appearance of

the parties to the suit i.e. the respondent and the petitioners before

the transferee court on 09.10.2023.

16. A perusal of this order dated 27.09.2023 of the court of Principal

District Judge, Srinagar reflects that the date of institution of the

proceedings with respect to transfer of the civil suit is 22.09.2023

on file no. 27/N of the Principal District Judge, Srinagar meaning

thereby on the same very day of 22.09.2023 when the court of 4th

Additional District Judge, Srinagar was directing transfer of the

suit to the court of the learned Principal District Judge, Srinagar

for the parties to appear on 27.09.2023, the court of Principal

District Judge was having the suit file to assign the date of

22.09.2023 of the proceedings before it.

17. While the Principal District Judge, Srinagar in terms of its order

dated 27.09.2023 directed the parties to the suit i.e. the

respondent and the petitioners herein, to appear before the

transferee court of the Additional District Judge (Bank Cases)

Srinagar (Designated Commercial Court) on 09.10.2023, but for

the reasons not coming forth from the record it was on

07.10.2023 that the transferee court of Additional District Judge

(Bank Cases) Srinagar (Designated Commercial Court) came to

diarize the civil suit on its file no. 129/N and proceed with it.

18. In this civil suit, the petitioners came to be named as two

defendants. In response to the petitioners' already filed

application for leave to defend at the time when the case was

before the court of 4th Additional District Judge, Srinagar, the

court of Additional District Judge (Bank Cases) Srinagar

(Designated Commercial Court) came to pass an order dated

30.10.2023 thereby directing the petitioners, as being defendants,

to deposit an amount of Rs.17/- crore with the Court by or before

next date of hearing as a pre-condition of the grant of leave to

defend and, accordingly, disposed of the application seeking

leave to defend.

19. The petitioners then came to submit an application under Order 7

Rule 11 CPC which in turn adversely resulted in an order dated

29.12.2023 passed by the trial court thereby passing a part decree

to the tune of rupees seventeen (Rs.17/-) crores in favour of the

respondent, directed its deposit by 19.01.2024, while permitting

the respondent to file objections to said application of the

petitioner, despite part decree having been passed on the basis of

purported admitted liability.

20. The trial court came to direct that Account Head

0218010200000028 maintained under Head 14th Finance to stand

attached with a direction to the Treasury Officer to seize Capex

Budget of the judgment debtors till further orders and further

directing the Branch Manager, J&K Bank, Balgarden to submit

the details of amount lying in the seized account no.

0218010200000028. The Branch Manager J&K Bank Balgarden

was further directed to file compliance affidavit on his part.

21. In terms of an order dated 20.02.2024 in response to an

application, seeking release of an amount of rupees seventeen

(17) crores made by the respondent, the trial court came to direct

the J&K Bank branch unit Balgarden to transfer the amount of

rupees seventeen (17) crores to the bank account of the

respondent as decree holder. Thus within period of limitation

prescribed for an appeal, the purported decree came to be

executed by the court itself without final adjudication of the suit.

22. It is at this stage of the case having literally conceded everything

in the respondent's favour, it has now occurred to the two

petitioners i.e. the Commissioner, Srinagar Municipal

Corporation (SMC), Srinagar/Jammu and the Superintending

Engineer, Nodal Officer, Drainage Circle Srinagar, Municipal

Corporation J&K Jammu/Srinagar, to get concerned and petition

this court.

23. From the facts of the case, this court reserves its observation

bearing serious concern to the manner in which the conduct of

the litigation has taken place.

24. A perusal of the plaint as well as the orders referred above on the

part of the court below do not reflect as to upon which suit

document the Order 37 suit came to be based. An Order 37 suit

surely can lie on written contract, bills of exchange, promissory

notes and similar documents. The underlying basis of an Order

37 suit is a written contract from which the suit claim as it is has

to come forth admitting of no other relief in any manner

whatsoever.

25. In the plaint, prima facie the appearing respondent has nowhere

identified as to where from the suit claim of rupees twenty crores

was getting borne to enable the respondent to institute the suit

under Order 37 of CPC.

26. It is para 9 of the plaint from where the suit claim came to be

stated and that is in the form of purported admitted bills allegedly

pending for a long time from where the respondent came to put

forth its grievance inter alia as under:

"Payment on account of loss and damages, on account

of prolongation of payment of admitted bills, loss of

profit and settlement of rates of extra items."

27. Prima facie it appears that the suit filed by the respondent was

not providing a written contract coming forth to constitute the

suit claim. Prima facie a case is made out for entertaining the

present petition under article 227 Constitution of India as there is

no formal adjudication of the suit which has yet taken place at the

end of trial court to result in passing of final decree for the

petitioners to come up in an appeal as the lis is still open before

the court, as such proceedings under article 227 Constitution of

India can be pressed into service for examining the legality/

validity of entire course of proceedings in the matter.

28. Issue notice.

29. Ms. Syed Tabasum Zafar Jalali, Advocate, who is on the caveat,

accepts notice. Caveat discharged.

30. Send for the record.

31. Meanwhile, further proceedings in the civil suit pending before the

court below shall remain stayed. The operation of the order dated

30.10.2023, the judgment/decree dated 29.12.2023, the order

dated 29.01.2024 and the order dated 20.02.2024 of the court of

Additional District Judge (Bank Cases) Srinagar (Designated

Commercial Court) shall remain stayed till next date before the

bench.

32. List on 10.4.2024.

33. Registrar Judicial of this court to ensure that the below mentioned

record of the cases is summoned:

i) Original record of suit file no. 129/N of 2023 titled "Magary Pratibha Joint Venture vs. Commissioner, Srinagar Municipal Corporation and another" from the court of learned Additional District Judge (Bank Cases) Srinagar (Designated Commercial Court);

ii) Original record of File Arb. Case No. 17/2022 titled "Magray Pratibha Joint Venture v/s Commissioner, Srinagar Municipal Corporation and another" from the court of learned Principal District Judge, Srinagar under section 9 of the Arbitration and Conciliation Act, 1996 disposed of vide order dated 13.03.2023;

iii) Original record of contempt file No. 09/M. A., date of institution 27.04.2023, contempt proceedings no.

2052/2023, case no. 2/2023 titled "Magary Pratibha Joint Venture v/s Commissioner Srinagar Municipal Corporation Srinagar and another";

iv) Original record of file no. 27/N of 2023 titled "Magray Pratibha Joint Venture v/s Commissioner Srinagar Municipal Corporation Srinagar and another" from the

court of Principal District Judge, Srinagar, disposed of vide order dated 27.09.2023.

v) Scanned record of CM(M) no. 120/2023 titled "Srinagar Municipal Corporation and others vs. Magray Pratibha Joint Venture."

vi) Original record of file Arb. P. No. 33/2022 titled "Magray Pratibha Joint Venture vs. Commissioner SMC, Srinagar and others" disposed of vide order dated 04.08.2023 by the Hon'ble Chief Justice.

Registrar Judicial, Srinagar to ensure the requisitioning of the aforementioned record by or before next date of hearing positively failing which explanation to be tendered for delay/default on the part of the concerned.

(RAHUL BHARTI) JUDGE Srinagar 26-02-2024 N Ahmad